Big Oil’s campaign donations result in taxpayer subsidies - report

Oil companies making donations to politicians are getting massive tax credits in return, despite President Obama’s 2009 call to stop subsidizing big oil, claims the Guardian following an investigation into three corporate projects.

Using a subsidy-tracking tool created by the nonprofit Good Jobs First, the
paper’s probe looked into projects by Shell,
ExxonMobil and Marathon Petroleum, and discovered that in each
case the companies received subsidies in the form of tax credits,
from politicians who were receiving campaign contributions from
the fossil fuel industry.

“At a time when scientists tell us we need to reduce carbon
pollution to prevent catastrophic climate change, it is absurd to
provide massive taxpayer subsidies that pad fossil-fuel
companies’ already enormous profits,” the Guardian quoted
Senator Bernie Sanders (I-VT), currently vying for the Democratic presidential
nomination.

According to the paper, Marathon Petroleum is benefiting from two
tax credits in Ohio, a 15-year credit for preserving 1,650 jobs,
and a 10-year credit for creating 100 new jobs. The Good Jobs
First database indicates the subsidies are worth $78.5 million,
while the company posted a $2.4 billion profit that year.

The tax credits were approved in 2011 by Republican governor John
Kasich, who received $213,519 in donations from oil and gas
companies that year, according to a report by political watchdog group Common
Cause.

Shell’s proposed refinery in Pennsylvania, worth $4 billion, is
due for tax credits of $66 million a year for 25 years. The
$1.6-billion deal was negotiated in 2012, when the company made
an annual profit of $26.8 billion, says the Guardian. Republican
governor Tom Corbett, who negotiated the deal, received over $1
million in campaign donations from the oil and gas industry.

Shell has spent $1.2 million on lobbying in Pennsylvania since
2011, and has secured supply contracts for up to 20 years,
including from fracking companies extracting gas from the
Marcellus shale field, the paper noted.

ExxonMobil’s upgrades to its Baton Rouge refinery in Louisiana,
second-largest in the US, are benefiting from $118.9 million in
state subsidies over 10 years. The credits started in 2011, when
the company made a $41-billion profit. According to
environmentalist groups, Louisiana’s Republican governor Bobby
Jindal received over $1 million in contributions
from oil and gas companies between 2003 and 2013.

According to the Guardian, the coal, oil and gas industries
received $550 billion in subsidies globally in 2013, the most
recent year for which figures are available. The World Trade
Organization (WTO) defines tax credits as a form of subsidy.

“Subsidies to fossil fuel companies are completely
inappropriate in this day and age,” said Stephen Kretzmann
of the NGO Oil Change International (OCI). A 2014 investigation
by OCI concluded US taxpayers were subsidizing fossil fuel
exploration and production to the tune of $21 billion a year,
despite President Obama’s 2009 call to eliminate fossil fuel
subsidies altogether.

“Every single well, pipeline, refinery, coal and gas plant in
the country is heavily subsidized. Big Fossil’s lobbyists have
done their jobs well for the last century,” Kretzmann told
the Guardian.

While Shell and Marathon have issued statements defending the
arrangements as legal and legitimate, a spokesman for ExxonMobil
said the company was refusing to respond to the Guardian’s
inquiries “because of its lack of objectivity on climate
change reporting demonstrated by its campaign against companies
that provide energy necessary for modern life, including
newspapers.”

The report on subsidies was published as part of the Guardian’s
“Keep it in the ground”
campaign, urging “the world's two biggest charitable
funds to move their money out of fossil fuels.”